As it looks forward to its next 50 years, Capricorn is going from strength to strength as a cooperative. Recently it has enjoyed unprecedented growth and is fast nearing 30,000 members.
The secret is in its culture of service to its members, exemplified by the passion and belief of outgoing Group CEO David Fraser.
After 18 years at Capricorn, five as its head, and over twice that in the automotive industry David Fraser has many illuminating memories. One he recalls, with a lesson about growth, was a time some years ago when talk at the cooperative was, they would reach a limit at 15,000 members.
“And I remember thinking perhaps we’ve set the bar too low,” Fraser says. “We really need to be thinking a lot more holistically and believe that we had something special.
The something special was the wide range of services and support they could offer members and the collective strength a large member-based organisation could have in improving the automotive aftermarket industry. This became the catalyst for more growth, but always returning to those basic principles.
“It took us 30 odd years to get to that first billion in sales and took another 10 to get to the second billion. We will be near $4 billion this time next year on the back of some of that strategic work that we did.”
Serving the members
But proud as he is of the growth of the cooperative, Fraser believes it is the importance of keeping the culture vibrant and living up to its ‘stronger with’ promise and the service this plays for the wider automotive industry that he considers the real achievement of his time at Capricorn.
“We are the collective of those 29,000+ small businesses, and their success is our success, and our success is their success. And for me, it’s really important that we continue to grow the membership because it’s a great opportunity for those small business owners to have a stronger and more sustainable future in what’s going to be a decade of change, with regards to the vehicle car parc changing to meet its future Net Zero targets.”
“We are very much a purpose driven business. Every time we make a decision, whatever that decision is, we will always look to do the right thing for our members. If those decisions were based purely on the commercial viability or the commercial perspective, you wouldn’t always do it, but sometimes it’s the right thing to do because it helps them as a small business owner, to be stronger, be sustainable and maintain a position of competitiveness.”
The collective strength for Fraser goes back to 1974 when a group of WA service stations formed the first buying group.
“The whole reason Capricorn was formed or founded in the first instance was the fact that you had these like-minded business owners who thought that if they collaborated and cooperated together, they would be able to be stronger than by standing alone.”
In times of change
Capricorn’s success as a cooperative with a wide range of Preferred Suppliers and its rewards programs for members are well known, but it also believes strongly in extending the help to service and support.
Investing in market research is one way Capricorn has been able to help members both by giving them more insight into the challenges facing the industry and where solutions lie. Last year their annual State of the Nation report, which takes a comprehensive look at the automotive aftermarket sector, focussed specifically on the skills shortage and made some striking findings. Fraser says it was part of a theme that has come through from members for three or more years and so the specific focus was stepping up to that need.
“We’re not going to be the silver bullet that fixes that problem, but we want to be part of the solution the industry needs to find by working together to help address it.
“We’re all feeling the pain of the problem, whether you’re small, medium or large business, whether you see it in the supply chain or the value chain, it’s a common problem for everybody and we want to be part of helping find the solution.
“For us, it’s using that information, looking at what more Capricorn can do to help drive better outcomes. Whether that’s opportunities for us to work directly with members, or whether its working with other industry associations or trade associations or working a little bit more closely with advocates to help and drive government decision making.”
What was different about the depth of the State of The Nation: Special Report on the Skills Shortage in 2023, is it looked comprehensively at all the sectors within automotive including collision repair and offered a dedicated website with resources, case studies and ideas on how workshops could overcome some of the issues of recruitment and retention of staff.
New technology, new ideas
Fraser says the surveys and research also help in shaping better decisions on how the cooperative can help its members on other key issues such as meeting the advance of automotive technology.
“This is about us stepping up and wanting to be part of shaping a future market. And by being really clear about the direction our industry is heading.”
This included an intense study tour for a small group, comprising of Executives and Directors, to understand where new drivetrains like EVs were heading and their potential impact on Australia.
“We visited Norway, Sweden and the UK, because those markets are more advanced than the Australian marketplace, to try and understand the impact of the changes that had already occurred in some of those Nordic countries. It was also about understanding what the downstream impact was at the at the workshop level.
“That intelligence now helps us be part of shaping the future of our industry, and specifically helping our members understand some of the things that they want to or should be aware of.”
Fraser says information they can offer can help a workshop understand whether they should be preparing to adapt or should be becoming proficient and equipping immediately.
“Our members will say one of the most significant marketing tools is word of mouth, contributing to more than 50 per cent of their new business. My message is; if you start turning away vehicles because you’re not ready for them, you risk losing, not just the customer you’ve turned away, you risk losing other future customers.”
Fraser says other learnings from visiting advanced workshops can also be shared with members such as how EV uptake affects workflow for maintenance and repair.
“A workshop of that kind in the future would be reliant on higher volumes and therefore, you’re going to need more cars in and out on a daily basis. Then you’ve got to think about trying to help the customer understand not to come back at the end of the day, for instance, but come back by lunchtime because otherwise you need to find some way to store that car.”
Lights, cameras, action
Fraser explains that one of Capricorn’s strengths is having the breadth to investigate future technology to see how it will serve members needs and help them meet these future demands. Their joint venture with remote technician service providers Repairify, who have established a global reputation before their launch in Australia in 2023, was an example of bringing the leading technology into the Australian marketplace.
“We saw that as a growing opportunity, a growing need for the market as more people invest in that sort of service and repair perspective.”
He said Capricorn was vigilant to the increasingly prevalent ADAS technology and the recognition that cameras, radar and in the future, LIDAR sensors were inescapable elements in new car comfort and safety.
“It doesn’t really matter whether it’s an electric vehicle, or whatever mode of drive train, the reality is ADAS is the future,” he says.
“I think vehicle connectivity is another way of the future. Telematics has been around for a long time but clearly vehicle connectivity is going to be a key future driver. As Capricorn’s business evolves over the coming decade, we will look to help our members and have a bigger part of that.”
New pillars of growth
Another example of Capricorn’s growth lies in the uptake of other services including loans and risk protection (an alternative to insurance).
“I look at our loan book as a barometer as to the health of the industry,” Fraser says.
“If people are prepared to reinvest in their businesses, through the need to buy more capital equipment then I see that as a positive. It’s another example of us helping out. We’ll always be looking for new pillars of growth to help support not just our growth but our members growth.”
This ethos and a brand loyalty to Capricorn have also helped with their insurance products which have enjoyed a 98 per cent renewal rate.
“Capricorn Mutual is a discretionary mutual and unlike an insurance company, operates as a non-profit entity solely for the benefit of its members. That is something we promote as a benefit.”
The industry specific application of risk protection also helps members because of the increased focus and knowledge of automotive businesses, their particular risks and liabilities.
“It’s very tailored to our members’ businesses. Our risk account managers can visit the members’ workshops, they can do a proper risk assessment in the business and help the member understand what might have changed because they sometimes overlook things themselves. We can help them understand their protection needs.”
He says the dedicated sales force means they can advise with preventative measures whether it is helping prevent fires in a spray booth by ensuring service is up to date or taking precautions with Lithium-Ion batteries, both in EVs and the multiple applications they have in tools in the workshop.
Not losing touch
But growth often comes with the risk of dilution and the challenge of keeping a culture alive. During his years at Capricorn, Fraser was determined to avoid this.
“We needed to grow the membership, but we also needed to be able to support a growing membership, and make sure that we were having good quality conversations each time we visited the workshops.
“The last thing I wanted to do was to grow the membership to a point where our sales force were only focused on new member acquisition and therefore weren’t able to spend quality time with those members who had joined.
“For me it was about really repositioning Capricorn in the marketplace. Certainly, grow the membership, because a growing membership would help grow our business, but I also genuinely believe that it would make our industry stronger. What was driving me was wanting a stronger, independent aftermarket industry.”
Fraser is a firm believer a culture must be the foundation for successful growth.
“You can have the best dressed strategy in the world but if you haven’t got the culture to support it, then you won’t be successful. That’s been an important part of what we’ve tried to build. My goal was to really work hard on developing our culture and that’s something that you should never stop working on.”
Stepping away from Capricorn later this year, he will leave the helm in the hands of current CEO of Automotive Brad Gannon. Fraser will look toward more board activity where he believes he still has a lot to offer. He believes it is a passion for the industry that he will take with him, after it has been one of his formative characteristics over the decades.
But looking back, Fraser says, his greatest satisfaction has come on a more basic level, with the direct contact with the members, talking to them about their businesses and how Capricorn can help.
“They are salt of the earth people. And I’ve really enjoyed trying to understand what their pain points are and by listening to them, work out how we can foster a better Capricorn,” he says.
“You’ve got to be a good listener and you’ve got to encourage people to have those kinds of honest conversations. I’ve always been one that says, ‘don’t be defensive, be curious.’”
His parting thoughts return to an optimism about the industry and his belief in strength that grows out of unity.
“You can achieve more by working together than you can by standing alone,” Fraser says.
“When I consider the numerous challenges our industry is currently facing or will encounter as it evolves over the next decade, it’s clear that many of these issues are shared. By collaborating, we can work together to find solutions to these common problems.”